Home Equity Loan

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Related to Home equity loans: Home Equity Line of Credit

Home Equity Loan

A loan in which the one borrows against the value of one's home. That is, the collateral of a home-equity loan is one's house. The amount in these loans is generally the difference between the homeowner's equity in the house and the market value of the house. The homeowner receives the amount of the loan in a lump sum, and may use it to finance other purchases or ventures. If a home-equity loan is not paid off, the lender may take possession of and sell the house in order to pay for the loan; this can occur even if the homeowner continues to make payments on his/her mortgage. These loans generally have variable interest rates, which are nonetheless still lower than most other lines of credit. Home-equity loans are sometimes called second mortgages or equity loans. See also: Reverse mortgage.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

Home equity loan.

A home equity loan, sometimes called a second mortgage, is secured by the equity in your home.

You receive the loan principal, minus fees for arranging the loan, in a lump sum. You then make monthly repayments over the term of the agreement, just as you do with your first, or primary, mortgage.

The interest rates on home equity loans are generally lower than the rates on unsecured loans. However, when you borrow against your equity you run the risk of foreclosure if you default on the loan, even if you have continued to make the required payments on your first mortgage.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.

Home Equity Loan

Same as Second Mortgage.

The Mortgage Encyclopedia. Copyright © 2004 by Jack Guttentag. Used with permission of The McGraw-Hill Companies, Inc.
References in periodicals archive ?
In 2005, its heaviest year, the credit union booked roughly $82 million in home equity loans, Pouch reported.
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An expert loan consultant, Pete Hitesman has personally originated more than a thousand home equity loans and credit lines.
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in addition to mortgage miles, HomeLoanCenter.com will provide 2,500 miles for home equity loans under the same conditions.
This e-stop offers free sections including articles not labeled "members only" a glossary containing more than 6,000 financial terms and financial tools such as calculators for amortization, banking, home equity loans, insurance and mortgages.

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